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If you could only pick one, income statement or the statement of cash flows, to review...

If you could only pick one, income statement or the statement of cash flows, to review before investing in a company, which one would you select, and why?

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Answer #1

I'd select the income statement.

Reason: Statement of cash flows only shows the cash transaction of the current period but with the help of income statement, an investor can also analyze the non-cash expenses and transactions of accrual nature entered into by the company before investing.

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